US closes Arizona pension investment trust probe

By BOB CHRISTIE, Associated Press

Monday, November 24, 2014

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PHOENIX (AP) — The U.S. Attorney for Arizona has found no evidence that Arizona’s pension fund for public safety workers committed criminal misconduct when it valued some real estate properties in its $6.2 billion portfolio, pension officials announced Monday.

The board chairman for the Arizona Public Safety Personnel Retirement System, Brian Tobin, said the decision by the US Attorney for Arizona closes the books on the yearlong investigation of the pension fund.

The FBI and U.S. attorney’s office launched the probe last year into whether real estate values were inflated to boost performance bonuses awarded to some senior investment managers. The allegations were brought to the attention of prosecutors by former pension system employees.

“This was and is a serious allegation,” Tobin said. “It’s not true and it never was true.”

Tobin said the investigation, and two others done by its independent auditing firm and the Arizona Auditor General that also cleared the pension fund, are examples of the system’s checks and balances working correctly.

Board lawyer James Belanger said the Justice Department is completing a review of several people he would not identify. But he said he expects they’ll be cleared as well.

The pension plan released a letter from the U.S. attorney to Belanger confirming the decision. Cosme Lopez, spokesman for U.S. Attorney for Arizona John Leonardo, confirmed the contents of the letter but could not comment on any additional reviews.

The pension plan for public safety employees is facing a massive shortfall between its assets and what it expects to owe police and firefighters across the state when they retire. The latest projection as of June 30 shows $12.2 billion in liabilities compared to just $6.2 billion in assets.

The pension board also fired its top administrator, Jim Hacking, in July after it was revealed that he had illegally awarded pay raises to five senior employees.

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Pensioners First: Like we said- innocent, holy, and pure as the driven snow.